Good afternoon and welcome to the Net 1 Second Quarter Fiscal 2008 Earnings conference. (Operator Instructions) I would like to turn the conference over to Dr. Serge Belamant, please go ahead sir.

Good morning to our investors in the US and good afternoon to our investors in Europe and of course in South Africa. Thank you very much for joining us all in our Fiscal 2008 Second Quarter Earnings Call. Let me take this opportunity to wish you all a prosperous and healthy 2008. As usual, Herman Gideon Kotz our CFO is with me today. Both our Press Release, and 10-Q are available in our website, at www.net1ueps.com. We will be making forward-looking statements on this call and I call your attention to the cautionary language contained in our press release regarding the risk and uncertainties associated with forward-looking statements. In addition, during this call we will be using certain non-GAAP financial measures as defined in the SEC rules. We are required by these rules. We have provided the reconciliation of the non-GAAP measures to the most directly comparable GAAP measures as exhibits in the press release dated yesterday. We will primarily discuss our results in South African Rand, which is a non-GAAP measure. We analyzed our results of operation in our latest 10-Q and in our press release in South African Rand to assist investors in understanding the changes in the actual underlying trends of our business. The company’s result can be significantly impacted by currency fluctuations between the US dollar and the South African Rand and therefore for clarification purposes. I would like to reiterate that the use of South African Rand is a non-GAAP measure and the appropriate GAAP presentation is included in our annual report on Form 10-K, our 10-Q and press release and we advise our investors and analysts to review the company’s result in terms of US GAAP. During the Second Quarter of Fiscal 2008 the South African Rand strengthened against the US dollar. However, as…

I will discuss the key trends of the second quarter fiscal 2008 compared to the second quarter fiscal 2007 along with the key trends sequentially between the second and first quarter for fiscal 2008. We have also updated the frequently asked questions section in our press release to provide further clarity on the questions we are most often asked by our investors and analysts. Again, for clarification purposes, I would like to mention that my following discussion will be based on our results in South African Rand as this provides the best indicator of the group’s actual operational performance and this is a non-GAAP measure. In order to order to review our results in terms of unit dollars and GAAP, please review our quarterly filing on Form 10-Q as well as our press release filed yesterday. For Q2 of 2008, our average rand-dollar exchange rate was 6.78, compared to 7.32 for Q2 of fiscal 2007 and 7.12 for Q1 of fiscal 2008. Looking at the current situation the rand has weakened significantly against the US dollar during the first half of our current quarter of Q3 and is currently trading at around 7 rand 70 to a dollar. Any significant weakening of the rand obviously reduces the dollar equivalent results of our South African operations, which is why we provided you with constant currency information in our press release and on this call as the core operational drivers are clearly visible from these numbers. I am very pleased with our second quarter results, which reflect our most profitable quarter ever. Due to the seasonal nature of some of our core activity, the second quarter is traditionally the softest quarter which further underlines the exceptional trading performance of the group during the period. Revenue for the second quarter of 2008 was…

(Operator Instructions) Our first question is from Drew Chapel of Morgan Stanley, please go ahead.

I guess, let me just start with the newest issue which is the power crisis and I think we follow why some of your service does not get disrupted and what issues or impact that the productivity have? And secondly, are you seeing any change in impact on some of your competitors in banks?

Yes, obviously the sudden implementation of load shedding which is really the same as load sharing considering we have to share what is there. Certainly, really created an environment that made it difficult people to operate, from the point of view that in terms of productivity in the office environment where people cannot work on APCs or you suddenly have no light or your service does not work or it takes you two hours to go to a next meeting rather than 20 minutes because the traffic lights are out. So there is absolutely no doubt that there have been a lot of disruptions for many businesses throughout South Africa because of the lack of power, obviously no involvement. We have aired always our disaster recovery plan in place and we have obviously activated some of those plans that have allowed all of our, let us call them, critical services to operate with immediate effect. I do not believe in anybody thought that power disruptions were going to continue and in fact we did not know they are likely to continue for the foreseeable future so we have obviously activated our plan B, which means that within the next few weeks, we will be in the position that all of our services, critical or not we would be able to continue to operate with out any interruption. But does not mean of course that other businesses are not affected, it does not mean that we can obviously provide power to traffic lights. So there is no doubt that it is affecting still the ability to perhaps communicate face to face with other people or other costumers. As far as we are concerned we are back on track and at this point in time, we do not really believe that the…

Great work on Ghana! If we could just spend a minute there and sort of just walk us through. So what has change in the last couple of months when you went in with initially the 23 banks? And the Central bank recommended that now making it mandatory. So walk us through the process of what happened? And secondly, is that likely to impact or accelerate some of the work that has happened in Nigeria with poor countries opposed?

I think that is a very very good point and I would feel that many people have underestimated what this Ghanaian contract actually means. As you are aware, the tender was purely for us to deploy and national payment system was very much the smart card component. Ghana to basically offer banking services at an affordable cost to more of Ghanaian people. Now that is the way it kicked off and initially across the people that are normally targeted to do this are what I would call other first tier banks. What the central bank then decided to do is to say, there are many other financial organization in Ghana, who are not what you call the first tier banks, second tier banks, credit unions, building society top banks as well as what they call the Apex bank, which are already community based banks. And what then the Central Bank decided to do is to say, “no, in order for this to work correctly, we need to ensure that all financial institution in Ghana have to and must participate in a new payment, a national payment system, and that is one of the very first regulations that was stipulated. Now , following this, the next change of mind by this bank was to say, we believe that if we want to take full advantage of the benefit of the UEPS technology including the ability, for example, to detect and to prevent money laundering, the ability to eliminate ghost workers, through our one too many search engines as well as a finger print technology and the ability to eliminate forth, to eliminate the possibility of card stealing, is as you know cannot go with an extra or in fact enable the people to steal cards, which may of may not be…

Our next question is from Ryan Mcgaver of Capstone investment, please go ahead.

I guess we could briefly reassess the power issues, when electricity go out for a couple of hours a day, a few days a week, and out for a whole day.

It varies, the status of the load shedding as they call it or the rolling blackouts I think is the most appropriate term is determined by the ability of the grid at any given point in time. Added to worst point which was around two weeks ago, we were at ground stage two which is supposed is like Discom1 and at that point in time there would be up to three outages a day lasting approximately 2.5 hours each. That happened for one or two days generally, there will be one power failure of two and a half or three hours, but I must say since this has been declared as a natural emergency and the measures have been taken, specifically around the mining industry, the power supply situation has improved quite a bit and for the last week or so, specifically at the head office at Rose Bank, we have not had any power outages. Ryan Mcgaver – Capstone Investment: Okay, thank you for that. Since, Ghana the hardware sales were almost better you have expected, should you expect in Q3 for that, for hardware sales to get lower than in Q2.

Remember that in the hardware sale and software sale segment, we include the software portion, as well and out of the total Ghana initial contract value for the first phase of around $18 million. We recognized and that is for the hardware, the software and the customization portion. We have recognized $6.5 million to date. So, the contributions that you can expect from the Third and the Four Quarters, I think it would be equal in size, if not slightly higher, than what you have seen in for Q2. Ryan Mcgaver – Capstone Investment: Okay, my final question before I jump back into Q, as far as the STC, I realized you have no way of knowing whether or not it will be enacted. Is there a key date we should look for?

You mean the complete abolishment of the STC. Ryan Mcgaver – Capstone Investment: Correct, that second phase.

The second phase is really a laborious process that the government has to embark on and revolves mainly around our treasury department renegotiating all of the major international tax treaties, because they are replacing a company-based tax with shareholder based tax and clearly, the main issue resides around foreign shareholders. We understand from the updates that we get provided with, every couple of months that those process is well underway and that they still hope to complete the process to replace STC with a shareholder-based tax toward the end of this year, but most likely in the First Quarter of next year. So, I would say that most probably the best news that we could look forward, most accurate that we could look forward to will be in the Annual Budget Speech, which we will have in the 20th of February this year. I am sure that the Finance Minister will give us an update on the progress and I think for a year, following that, there is not much that will happen formally.

Our next question from Mark Brown of IM Portfolios, please go ahead. Mark Brown – IM Portfolios: Mine is a really two-part more philosophical question that centers really on communication with current shareholders and potential shareholder of which Serge, in your opening comments, you said that we have signed a temporary agreement with Indonesia right now and that is a prime example, if we have done that, why we have not made a press release with details of that temporary agreement and maybe outline for the plans, timetable and so forth for movement from a temporary agreement to a contract.

That is a very, very good question and I would try to answer that the best I can. We have been called many things and one things that we have not been called is that we are not the type of company that just announce anything, until we are very, very sure that in fact, it will happen and until we have a very clear understanding of what it will mean. In other words, when we look at Indonesia and Indonesia as you know is a fairly large country with a huge potential. What wanted to make sure, because of the uncertainty around this new top of contractual make-up that we led to entering to, which is very different to the type of thing that we have done in the past where we have to basically entered in terms of the risk reward scenario. We are already the quantifying the risk reward scenario and we are also busy looking at the time frame for what Brenda has already agreed in Indonesia, namely the installation of our first palette in one of the Islands, which we believe we can probably do very, very quickly, but that purely would demonstrate a working system. So, I think what we will be doing over the next couple of weeks or couple of months is certainly to try to formulate, something a little bit more exact in terms of the way we are in the first phase, and let the second or third stage of Indonesia could look like, assuming that the base actually happens. You are right, maybe you know we have been told that maybe we did not give our investors enough information, we tend to agree to that, simply because that we have informed, but perhaps it is better not to say…

Again, very, very valid point and I can assure you that in fact our last board meeting, which was only a few days ago that there is something that has come about again and I think as we have lifted now for I think for so much for four years and to be quiet on some mistakes, some of the blame, because we are conservative. But, I think we are starting to understand the difference between the legal requirement, the compliance requirement in the US and NASDQ. And also, what both retail and long-term investors and hedge fund naturally expect us to say. It has taken us awhile that we got this balance and I can assure you that you will see something changing, very much in a short term and that we are beefed-up the carrier of the company, because we do intend to start telling people a little bit more about what we do and certainly while we do it. I think everybody actually deserves to know and candidly, our own people internally deserve to get that recognition. So, I can only give you my apologies for not doing that in the past, but we understand this a little bit that we know it is needed and we are going to do it. Mark Brown – IM Portfolios: I step out of line, let somebody ask question and I appreciate that; you drew the differentiation between retail investors and long-term investors. I have been and have clients that have invested in this company for five years and as I look at the turn over in Institutional Investors, I think it maybe just opposite from that you are actually inferring. Thanks a lot guys.

Our next question is from David Koning of Robert W. Baird. David Koning - Robert W. Baird & Co., Inc.: First of all, thanks for all the detailed disclosures again in the Q1, one that found that was particularly interesting was the first time you kind of broke out Columbia and just showed how well, once you get something get going, you can really ramp it. I think in September, your 10,000 transactions and by December you were already close to 30,000 transactions and I am wondering you are still in a little bit of a lost mode, given it is early. How many transactions that you think you will get to on a kind of a normalized run rate. First of all, per off and secondly where do we need be to break even and then, what could long-term profits be in that subject.

Again a good question, we are getting one of financial guys to quickly look this up for you, because as you know at the moment this is pretty small talks about business, but I think you picked up and something, which is very important. You know, when we ramp up something, like for example Columbia or Vietnam and candidly the two of them are very similar. You have picked on the fact that now that we have gotten the technology embedded and we have got the right place, for example in Columbia we were looking I think what is the fifth largest, probably the third largest cellular phone operator, we have now signed the biggest cellular phone operator, in terms of an MOU, but it always starts with an MOU. Now, the bottom line is that if you look at the population, of course, in Columbia, which is probably about the size of South Africa and you look at for the size or the amount of transaction that come through in South Africa, in terms of prepaid. We are basically, very much, at the very beginning of what could be an exponential curve, so there is no doubt that, that business in its own right and I can name one business in South Africa called Blue Label. That this business, or least the ceiling income that they have listed on the stock exchange and roughly the market cut is around 4 billion rand, so we believe that each one of these businesses that is running VTU has the potential to go to at least that size. We must also understand however that the intention of using VTU for us was having the foot in the door that as soon as VTU stopped operating is to bring in the UEPS Technology…

Again, it is good points though, in Ghana, remember that we have gotten some further order to the deed, so I think the initial contract value was around $27 million or $28 million, which includes the recurring piece, it is going up again by a couple of million dollars as 41 to 30 mark now. Now, we expect the Presidential Loans to occur in the first couple of weeks in (inaudible) that is when they have planned it. It might be a couple weeks later, but it does not really matter, which means the systems phase 1 must be implemented and we are expecting toward the end of May or June. Certainly to have already a lot of the cards have been issued and that is going to depend very much on the ability of the financial institutions to register two million people, which is not quite simple as I think what everybody thinks. So, in my view, because the way that we recognize revenue in Ghana. I think we have chosen a method, which is percentage based. In other words, it is percentage completion that over the next two Quarters, and when I say two Quarters we are talking about Third and Fourth Quarters. We probably found that we will probably be around 60% to 70% of the revenue specifically on the software side. That is the high margin business and the remaining will probably happen in the Third or the First Quarter of next year of 2009, but then I think you will see even further order of the Ghana for ATMs, for cards that are also going up to beef up as Second Quarter of 2009 and of course, at that stage we are also going to start getting revenues coming in from what we call annual…

You know once again, this is a question that everybody asks and I wish we could predict the entire future, but I can only tell you what we are attempting to do and it does not necessarily mean we will do it, although we are normally pretty good in doing what we say we are going to do. We made the call that there was no point, once we have proven that technology and the fact that people wanted it, to try to continue to market or to sell double UEPS to individual people. It will take far too long and candidly would become like a bank. Whereby we would simply try to advertise and spend millions of dollars in advertising, hoping that somebody would knock on the door and sign and say, ‘Please kindly open an account.’ We decided the only way to do that without going through organizations that is already today service for whatever reason, million of customers. We have got these organizations, we are in the final steps of signing some exclusivity deals with a lot of them and a lot of them see a huge of amount value to work with us simply, because we do not compete with what they do today, but we can only sell the end-product. So, these organizations vary in terms of numbers of customers from 350 thousand down to about 2.7 to 2.8 million. If we can simply engage one or two of those, of which we have four big ones. To actually start selling directly to end-users themselves and also the organization, they are going to sell to impress. We feel that confident as Herman has mentioned that we should be able to pick up our first million customers very, very quickly indeed. I think Herman mentioned three years, but that is because he is a chartered accountant and it is because as an accountant he is obviously very pessimistic and very cautious. I would be certainly disappointed if we only manage to sell a million people over the next three years. Imagine that would mean that something in our plan did not work and we are not going to wait for three years, waiting for it not to work, if we see it is not working we are going to adapt the plan, where we believe we know that we can actually accelerate this penetration.

We have two further question, the first is from David Pickering of Noonday Asset Management, please go ahead. David Pickering – Noonday Asset Management: Serg, I think you said in your opening comments that the reasons given by Sasa for the extension request were less than clear or not as clear as you would have liked. Perhaps you could just elaborate it, what do you mean by that.

The reason why I said that is because I had forgotten the exact wording that they have given us in the letter and I think that the wording was due to unforeseen circumstances. My view, you know you fight to say due to unforeseen circumstances, I will not be able to bid my target by 20%. I do not think you would necessarily think that I am being really, really clear and I think if you look and try to remember. What I did mention is that we firmly believe that the change in the National Executive of the ANC. Whereby, a new set of people are going to come in and are going to become the people that basically run the party. We believe that they have to be a freely major hand-over, between the existing government officials and basically the new incumbents and we firmly believed that that in itself is actually slowed down if not arrested of the process until that negotiation on its handover will take place. So, we think it is no more difficult than that and that is why I have always said if this thing does not happen before Christmas or before the 15th of December. In my view, it would not really happen at all, simply because this thing could not be delayed until of effect the new election in 2009. Whereby, another tender could then go out after that. I am still reasonably confident by what we are hearing that there is a good chance that there might still be fraud even if they give an extension to actually award the tender before the end of March of 2008. But, they will only do this once that the handover has taken place and both sides agree with each other, in terms of the windfall. If they do not, nothing is going to happen until a new government of 2009. But, of course, this is entirely mass speculation and I am not a politician.

Our final question is from Peter Boelhouwer of Matrix Capital, please go ahead.

I just have a quick question in the last conference call you alluded to a trip Brenda was making to Dubai, just wondering if there is anything happening in that region, as well if there is any update.

You are right; Brenda did make the trip to Dubai, because I would not allow her to go to the actual destination country at this point in time. And, it is absolutely no doubt that that is moving very, very well and we expect and I think I did put the word in my initial opening and we still feel very, very confident. That certainly and specifically a country like Iraq, will be a country that I think mentally, they decided that they would like to use our technology because it will solve a lot of their problems and I know that Brenda ahs been working very, very hard between our attorneys and the ones from Iraq to actually finalize these agreements. I think this could be one of the effective deal in my view that if it comes to that will be even far better than the one that we did in Ghana. So, let is touch wood and hope that that happens sooner rather than later.

Any sort of skeleton details on the business model or is it too early?

It is a little too early, but it will certainly not be the sale of technology as you have seen it in Ghana. It is going to be based on whether an outsourcing agreement with some sort of percentage top line that we would be taking for our efforts. So, I think it is going to be something a little safer for us and at the same time, in the long-term it will be something more lucrative, but it will be a little less money up front. I would rather go for the medium to long-term benefit, in terms of recurring revenue rather than the initial hit, which us very natural as well, but often you come above.

Dr. Belamant, there are no further questions, would you like to make concluding remarks?

Yes, I think at this point, I would just like say thank you very, very much to all of the investors and all of our shareholders, and it is great to know that a lot of you still very much believe in what we do. We certainly do and we think that every month, every birth of new contract or every new technology that we put up, I think positions us to become certainly one of the leading payment systems in the world and hopefully, we will still strongly believe that we can become well tended in payment system, specifically for developing economies. I really believe it, I really believe they need it and I really believe and candidly today, there is not out there who can do it. So, for all its worth, I hope you all have a either wonderful afternoon or wonderful morning. Thank you very much for attending.

On behalf of Net 1, that concludes today’s conference. Thank you for joining us. You may now disconnect your lines.

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THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank